Billionaire Sacklers’ immunity threatened as DOJ moves to block opioid deal

September 16, 2021 by No Comments

Enlarge / Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm staged a protest outside Purdue Pharma headquarters over the recent controversial opioid settlement.

The Department of Justice is fighting to strip the billionaire Sackler family of the sweeping legal immunity granted as part of a controversial $4.5 billion opioid settlement.

The department filed a motion late Wednesday to block the implementation of the settlement until appeals can be heard in a higher court. Attorneys for the department argued that some aspects of the deal could go into effect quickly, complicating the appeal, according to NPR. Along with the DOJ, Connecticut, Maryland, the District of Columbia, and Washington state are also preparing to fight the settlement.

The Justice Department also requested an expedited hearing within the next two weeks.

William Harrington, who serves as US trustee for the Justice Department, said in filings Wednesday that Federal Bankruptcy Judge Robert Drain was wrong to approve the settlement on September 1 and that the decision would likely be overturned.

The settlement essentially dissolves Purdue Pharma, which was owned and largely run by the Sacklers. The company aggressively and deceptively marketed OxyContin beginning in the 1990s and is largely seen as sparking the devastating epidemic of opioid addiction and overdoses that has killed nearly 500,000 people in the US over the last two decades. Purdue pleaded guilty twice for wrongdoing in its marketing of OxyContin in that time. The settlement put to rest thousands of opioid-related lawsuits against Purdue, which had declared bankruptcy under the crushing litigation.

The Sacklers were directly involved in Purdue’s opioid business and, by their own account, pocketed more than $10 billion from opioid sales. But the family has repeatedly claimed no wrongdoing and said it acted ethically.

Undone deal

Still, as part of the settlement, the Sacklers agreed to never again manufacture opioids and provide $4.325 billion to fund opioid addiction prevention, treatment, and recovery programs. They also agreed to hand over control of family foundations valued at no less than $175 million.

But that $4.5 billion agreement came with a big string attached: the Sacklers demanded that they be granted legal immunity from future opioid-related claims. Such liability releases can be granted in bankruptcy cases, but the Sacklers themselves did not file for bankruptcy.

Judge Drain, who himself called the settlement a “bitter result,” argued in his approval of the deal that it was the best way to get any money out of the Sacklers. “I believe that at least some of the Sackler parties also have liability for those [opioid] claims… I would have expected a higher settlement,” he said. But “without the releases, the plan would unravel.”

In filings Wednesday, DOJ trustee Harrington argued that the releases are unconstitutional because they deprive people of the ability to make legal claims—a form of property—against the Sacklers, according to The Wall Street Journal.

“The Sackler family’s attempt to hold [Purdue’s] reorganization hostage unless the non-debtor releases are imposed does not justify taking third parties’ property… without their consent, adequate notice, or any opportunity to be heard,” Harrington said.

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